Digital Investment Costs BBC £154m

The cost of developing digital television and internet services set the BBC back £154 million, or 7% of licence fee income, according to the Corporation’s Annual Report and Accounts 98/99, released this afternoon. As part of its digital ventures the BBC has launched BBC Online, now the most-used content website in Europe.

The Corporation has faced a lot of criticism for funnelling millions of pounds into digital products, the argument being that licence fee payers should not have to fund services which not many people actually use. Speaking on Radio 4’s Today programme this morning, chairman Sir Christopher Bland countered this argument by saying that all new services initially play to small audiences. As an example of this, Bland offered the early days of colour television. The BBC today promised not to spend more than 10% of licence fee income across all its digital investments.

Recent months have also seen the BBC lose the broadcasting rights to a number of key sporting events, including the FA Cup and Test Match cricket. Responding to this, Bland said that whilst he was disappointed to lose sports coverage, it is necessary to look at the bigger picture: “In an era when subscription and pay-per-view [services] have far greater resources at their command than the BBC will have, and focus specifically on sport, it [the BBC] was bound over the last five years to lose events,” he said.

The BBC’s commercial arm, BBC Worldwide, reported a turnover of £429 million and returned £81 million to the BBC – 8% higher than last year. A significant contribution to this came from sales of the Teletubbies worldwide. The children’s TV programme made a record £32 million during the financial year.

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